The Sports Law Review: Ecuador

Organisation of sports clubs and sports governing bodies

In Ecuador, every person has the right to practise any sport in their free time according to the Ecuadorian Constitution Law.2 In addition, the state recognises recreation, physical education and the practice of sport as a fundamental right. This is regulated by the Sports, Physical Education and Recreation Law (the Ecuadorian Sports By-laws), created in August 2010 by the Ecuadorian National Legislation Department, which in over ten years has established all the parameters to create and manage clubs, leagues, associations, federations, athletes and every sporting entity in general.

In addition, the Ecuadorian Sports By-laws also have competence to promote and develop the practice of sports, physical education and recreation for the entire Ecuadorian population, the correct use of public sports venues and national resources directed to sports, physical education and recreation.

i Organisational form

According to the Ecuadorian Sports By-laws, sports are classified on four levels:3

  1. amateur sport;
  2. high-performance sport;
  3. professional sport; and
  4. adapted sport or paralympic sport.

Amatuer sport4 includes every activity organised by legally created and recognised sports organisations in the areas of research, the search and selection of talent, sports initiation, teaching and the development of future athletes.

High-performance sport5 is the sports practice of high level organisations, and includes integral processes oriented towards the athletic improvement of athletes, by taking advantage of technological and scientific advances within the technical processes of high level training, developed by legally constituted sports organisations.

Professional sport6 includes activities that are remunerated and are developed by legally constituted and recognised sports organisations, from the search for and selection of talent to high performance. Each Ecuadorian sports federation regulates and supervises these activities through regulations approved in accordance with the law and statutes.

Adapted sport or paralympic sport7 for people with disabilities is one of the forms of sporting expression of equality to which all human beings are entitled, regardless of their psychomotor or intellectual capacities.

ii Corporate governance

The Ecuadorian Sports By-laws don't include specific good governing rules for sports organisations, but some articles provide the necessary tools for that purpose.

For example, Article 5 establishes that citizens who are in charge of organisations covered by the Ecuadorian Sports By-laws must promote efficient, inclusive and transparent management that prioritises the human being. The non-observance of these obligations will give rise to sports sanctions without prejudice to the determination of corresponding responsibilities by public departments.

Article 6 provides regulations giving autonomy to the administration of sports that receive public funds or administer sports infrastructure owned by the state, which must be framed in the national and planning sector, and also submit to legal and regulatory regulations, as well as the evaluation of their management and accountability. Sports organisations that receive public funds must respond to the resources and results achieved by citizens, the competent decentralised autonomous government and sports entities.

Finally, Article 21 gives minimum rules on how a sports entity should be structured:

  1. a general assembly;
  2. a directory; or
  3. others, according to the status of each sport entity.

In most cases, each sports federation will give the rules for good governance of sports organisations, and there are more specific rules for good governance of football clubs, which is the most developed sport.

iii Corporate liability

In Ecuador, sporting organisations are considered non-profit private law entities, so there is no liability for managers or officers in the sports law system, except when they manage public funds or administer public sporting venues.

Article 20 of the Ecuadorian Sports By-laws specifies that the directors of sports organisations that annually receive public resources greater than 0.000003 per cent of the general state budget must hire a qualified and guaranteed administrator to take charge of the financial and administrative management of the public funds received by the organisation. This will be registered in the sectorial ministry. The administrator will be liable for civil and criminal acts, without prejudice to the responsibilities arising from applicable legal instruments.

For a sports limited company, the Company Law8 will delimit the liability of the acts of the board of directors.

The dispute resolution system

As in most of the cases discussed in this chapter, sports in Ecuador do not rely on any specific way to solve disputes that may arise, and the Ecuadorian Sports By-laws just give minimum details of such a system.

In the case of sanctions, the Sports Ministry9 has the competence to impose the following sanctions on directors, managers, authorities and athletes that fail in the fulfilment of the Ecuadorian Sports By-laws:10

  1. warning;
  2. financial sanction;
  3. temporary suspension;
  4. definitive suspension; and
  5. limitation, reduction or cancellation of the incentives granted.

Since in Ecuador there is no specific dispute resolution system created by the Ecuadorian Sports By-laws, it is part of the competence of the Sports Ministry to enforce sanctions.

In the case of specific sports, each national federation has the autonomy to impose sanctions according to their status and rules on the participant clubs, athletes, directors, managers and other authorities under their scope.

i Access to courts

Access to courts in Ecuador is difficult as an athlete, which is a huge problem in our sporting system because it is not easy to access courts and even harder to access specialised courts.

The only article that mentions the possibility of appealing against decisions of the Sports Ministry is very ambiguous and does not offer any solution for this kind of problem, and reads as follows:

The decisions of organisations that make up the Ecuadorian sports system are appealable before the immediate superior sports organisation in the field of its competence, being the Sports Ministry which deals with and decides (again) in the last instance, as long as it does not conflict with the international norms dictated in this matter for the organisations that make up high performance and professionals levels, without prejudice to the resources and actions provided for in the law and in international agreements.11

Finally, each national sports federation has included the possibility to appeal their decisions to the Court of Arbitration for Sport (CAS), and the Ecuadorian Football Federation, for example, has included in its statutes the possibility of appealing against any decision according to the appeal rules.

ii Sports arbitration

Sports arbitration12 is accepted according to the Ecuadorian Sports By-laws as an alternative recognised way for the resolution of conflicts that may arise with respect to activities carried out in accordance with the Ecuadorian Sports By-laws.

Article 190 of the Ecuadorian Constitution recognises arbitration as an alternative dispute resolution. These procedures will be applied, subject to the law, in matters that by their nature can be compromised.

According to this Article, any sporting matter can be arbitrated on under Ecuadorian sporting rules and the Constitution, with no limits on specific topics. Therefore, arbitrators cannot refuse to deal with any sports cases and, in the case of an arbitration agreement, the rules and conditions will be the same as for any other legal case, with the condition of following the rules of national and international arbitration.

Finally, in the case of an arbitration decision between sporting entities (clubs, players, federations or intermediaries), it will be the competence of each national federation to enforce the arbitrator's provisions.

iii Enforceability

In Ecuador, the sporting legal system gives competence and autonomy to each national federation to enforce decisions according to their rules and statutes, so enforceability of sporting decisions will depend on the specific sport and the national federation of that sport. Each federation has its own rules and statutes with dispositions to fulfil by its members, and in case of a breach members face a process and a possible sanction. After that, a chamber with competence will make a decision and enforce it through its own judges against the affiliate members in the case of a sanction.

This structure is created by the Ecuadorian Sporting By-laws to maintain independence and enforceability by each national federation without having to present the particular case to ordinary justice.

If an affiliated member does not agree with the decision made by the national federation, it can be appealed within the same national federation to the appeal court, the international federation of the sport or CAS, depending on the statutes of that national federation.

Organisation of sports events

The organisation of a sports event in Ecuador depends on the city where the event is being held, because each city has its own rules and requirements to fulfil to host an event.

The Ecuadorian Sports By-laws do not include a specific section on the requirements to organise a sports event, but in general the main requirements are:

  1. authorisation by the city;
  2. authorisation by the organiser of the sporting event;
  3. authorisation by the national federation;
  4. establishing the rules of competition;
  5. trademark registration; and
  6. setting up of a medical department.

With the fulfilment of these requirements, it will be possible to host a sports event in Ecuador without any problems.

i Relationship between organiser and spectator

The relationship between the organiser and the spectator in Ecuador is a commercial relationship in which the spectator agrees on the terms and conditions made by the organiser of the sports event.

The Ecuadorian Sports By-laws do not require any specific rules to be followed, as the national federation of the sport will enforce the rules of the event.

The most relevant contractual issues and mandatory provisions are the prohibition of:

  1. unlicensed broadcasting;
  2. incitement to violence;
  3. homophobic, racist, religious or political statements;
  4. statements against the sports event or organiser; and
  5. ambush marketing.

Once these conditions have been met, the spectator will be able to enjoy the sporting event without major inconvenience.

ii Relationship between organiser and athletes or clubs

As mentioned previously, the relationship between organisers and athletes or clubs is a commercial relationship, and athletes and clubs will have to agree to the terms and conditions made by the organiser of the sport event.

Again, the Ecuadorian Sports By-laws do not establish a concrete procedure for the relationship between organisers and athletes or clubs, so it is necessary to check the dispositions of the statutes of each sport.

These conditions are established in the statutes of each sport's national federation, where there are sanctions if an athlete or a club refuses to participate in the sporting event. Those sanctions range from warnings to monetary fines or even the prohibition of participation in future sports events.

On the other hand, the statutes of every sport's national federation grants advantages to participants in sporting events in order to attract clubs and athletes to participate in their championships.

Some benefits that participants can obtain are economic income, sponsorship and the possibility of being chosen for an international tournament by the national team of the sport.

iii Liability of the organiser

According to the Ecuadorian Sports By-laws, specifically with regard to the organiser of sporting events, the liability of the organiser will depend on the contract signed with the city that hosts the event.

The regulatory framework does not consider any of these points, so for that reason most of the grey areas found in the legislation must be covered in the contract. The liability of the organiser must be precisely established in the contract with the host city in order to know from the beginning what kind of responsibility the organiser will have in any situation.

The contract will be the main document that contains the necessary information for the parties (organiser and host city), such as clauses of arbitration, sanctions, limits of responsibility, calculated damages, etc.

For that reason, Ecuadorian legislation does not consider criminal liability for the organiser of a sports event, and all disputes will be settled in civil courts.

iv Liability of the athletes

We can see again how liabilities are limited in the Ecuadorian Sporting By-laws in relation to the organisation of a sports event, since most liabilities will have to be established in the contract between the parties. However, if there is a liability that is not described in the contract, sports law will have to intervene, and if that is not enough, civil or administrative law can also been quoted.

In cases in which an athlete commits a particular act that can be related to civil or criminal liability, the prosecutor will have to collect enough evidence to initiate a judicial process against the athlete and for this to be accepted by the judge on duty.

In these particular cases, the hosting city or the affected consumer can present a claim against an athlete but without the certainty that the judge will agree to those terms. The process can go either way, with a request by the affected party or ex officio depending on the act committed by the athlete.

These situations would be covered by civil or criminal law without the necessity of including sports law to sanction the athlete, but it is possible that sports law could also intervene and establish a sanction according to the sport's national federation after a sanction by the criminal or civil court on the athlete.

v Liability of the spectators

In the case of liability of spectators, criminal offences are established in the Criminal Law Code.13

Article 397 of the Criminal Law Code provides dispositions of liability for spectators and includes a sanction of up to 100 hours of community work and prohibition on accessing any sporting venue for at least a year for:

  1. any person who violently and without authorisation invades the sporting field or the stage during a large event;
  2. any person who throws blunt objects on to the field, the main stage, the stands or places of transit or access;
  3. any person who surreptitiously introduces bladed weapons, firecrackers, flares or prohibited pyrotechnic material to sports or mass competition venues; and
  4. the sports leader or 'fan leader' of the participating clubs in sporting events in which acts of violence take place and who does not report them to the competent authority.

Liability for criminal offences is thus very precisely described in the Criminal Law Code, and the club that owns the sporting venue can start a process against the spectator using videos of the aggressor.

Besides criminal liability, each sport's national federation, according to their autonomy, can establish sanctions in its statutes or its disciplinary code for spectators that commit acts that threaten sporting events.

vi Riot prevention

In Ecuador, rioting is considered a criminal offence, and for that reason the prevention of riots is established in the Criminal Law Code, not the Ecuadorian Sporting By-laws.

The Ecuadorian Sporting By-laws specify only that each sport's national federation has the autonomy to establish sanctions in particular cases according to their statutes.

The article that covers the prevention of riots inside or close to a sporting venue is Article 397 of the Ecuadorian Criminal Law Code, and is the same as Section III.v.

A special case is the biggest football match in Ecuador, which is Emelec v. Barcelona from Guayaquil. The city where both teams play, Guayaquil, organised with the city police a special security reinforcement to prevent any potential problems between supporters.

Commercialisation of sports events

Commercialisation of sports events in Ecuador depends a lot on the planning of the government and the Sports Ministry.

Is very uncommon to see private sports events in Ecuador, and for that reason it is difficult to analyse the commercialisation of sports events. This difficulty is because our jurisdiction does not recognise the possibility of exploiting events for financial benefit, but in any case the commercialisation of a sport event in Ecuador will need to consider the following:

  1. intellectual property: the intellectual property of sports events in Ecuador should be the most profitable area to exploit, with the registration of the brand and posterior licensing for alliances with well-positioned national or international brands;
  2. merchandise: the commercialisation of authentic products made with unique qualities from sports events is another big opportunity for the event or organisers to obtain income related to the sports event. Although counterfeit merchandise is a problem that should be solved by the authorities, protecting intellectual property will help to prevent counterfeiting and protect investments;
  3. TV rights: obtaining TV rights in Ecuador is not yet an essential income for sports events because broadcasting in Ecuador is profitable as a separate industry, and for that reason producers prefer to invest in the production of different kinds of events or TV projects rather than sports. Although TV rights for football matches is the biggest income for professional football, that is not the general rule for sports in Ecuador; and
  4. ticketing: selling tickets in Ecuador is the usual way for sports events and clubs to obtain income. Many clubs and sports events still rely a great deal on the income generated by selling tickets to consumers.

i Types of and ownership in rights

Most sports-related rights in Ecuador depend on each sport, but there are a number of common rights.

As mentioned above, those rights are established in the Ecuadorian jurisdiction and the most common are exploited for commercial reasons as the most secure way to receive economic income.

Most Ecuadorian sports try to receive income with the following rights:

  1. intellectual property: the intellectual property of sports events in Ecuador should be the most profitable area to exploit with the registration of the brand and posterior licensing for alliances with well-positioned national or international brands;
  2. merchandise: the commercialisation of authentic products made with unique qualities from sports events is another big opportunity for the event or organisers to obtain income related to the sports event. Although counterfeit merchandise is a problem that should be solved by authorities, protecting intellectual property will help to prevent counterfeiting and protect investments; and
  3. ticketing: selling tickets in Ecuador is the usual way for sports events and clubs to obtain income. Many clubs and sports events still rely a great deal on the income generated by selling tickets to consumers.

Football in Ecuador is different, as it is the only professional sport, and it has a couple of ways to obtain economic benefits. The two additional types of rights exploited in football are:

  1. TV rights: obtaining TV rights in Ecuador is not yet an essential income for sports events because broadcasting in Ecuador is profitable as a separate industry, and for that reason producers prefer to invest in the production of different kinds of events or TV projects rather than sports. Although TV rights for football matches is the biggest income for professional football, that is not the general rule for sports in Ecuador; and
  2. transfer rights: transferring players in football is a very important way for clubs to receive income. In Ecuador, most football clubs are selling clubs and they try to sell players for large amounts to help them maintain a good structure.

ii Rights protection

The protection of rights in Ecuador depends on which right is being protected. In addition, the rights owner can choose which jurisdiction can protect his or her rights.

The jurisdictions that can be used for protecting rights in Ecuador are civil courts, criminal courts, administrative courts and sporting courts. The use of one will probably exclude the use of the others, and the decision to choose a specific jurisdiction depends on the benefits that the jurisdiction gives.

The use of a jurisdiction also depends on the statutes of the national sport federation, which will either allow or forbid access to a specific court.

The most common courts to use in Ecuador to protect rights are sporting courts because of the facilities provided and the specificity with the sport.

iii Contractual provisions for exploitation of rights

There is no mandatory provision in the Ecuadorian Sports By-laws that should be included in a contract for the exploitation of rights, and for that reason contracts are drafted in accordance with the Ecuadorian Civil Law Code to structure all the provisions that need to be included in the contract to be mandatory for all parties.

If a third person is interested in exploiting sports-related rights, the minimum provisions in the contract are the same as in a commercial contract and are as follows:

  1. parties;
  2. objectives;
  3. duration;
  4. payment;
  5. jurisdiction; and
  6. alternative dispute resolution.

Professional sports and labour law

The only professional sport in Ecuador is football, and thus it is the only sport affected by the Ecuadorian Labour Law.14 From third division football to first division football, all contracts are adjusted according to the dispositions established in the Ecuadorian Labour Law and within it players15 (male and female) and coaches.

Other sports are not linked to the dispositions of the Ecuadorian Labour Law.

i Mandatory provisions

The mandatory provisions of the Ecuadorian Labour Law that affect sports (as clarified previously, this refers only to football) are the following:

  1. duration;
  2. salary;
  3. type of contract;
  4. obligations for the club and the player;
  5. medical assistance;
  6. health insurance; and
  7. procedure to finalise the contract.

ii Free movement of athletes

In the Ecuadorian Sports By-laws, there is no limit on foreign athletes to compete in any domestic tournament, and the competence to establish a limitation on the inscription or participation of foreign athletes in a tournament depends only on the organiser of the sporting event or the national sport federation.

The final disposition to limit the number of foreign athletes in a tournament depends on the statutes of the competition from the national sport federation, but in any case it will not go against the national disposition of free movement.

iii Application of employment rules of sports governing bodies

Sports governing bodies in Ecuador are allowed to include employment-related provisions in their statutes or regulations from international sports governing bodies with the limitation that these dispositions cannot go against the Ecuadorian Labour Law or the Ecuadorian Constitution.

The dispositions from international sports governing bodies need to go through a process to be included in the Ecuadorian sports federation and in accordance with the Ecuadorian Labour Law or Ecuadorian Constitution.

Sports and antitrust law

Ecuador does not have an antitrust law for sports-related matters because clubs in Ecuador are considered non-profitable civil associations, and an antitrust law cannot be applied to the concept of non-profitable civil associations.

The exception is for football as a professional sport, and the Ecuadorian Professional Football League has created a Financial Fair Play Department to control the finances of professional clubs that participate in the Ecuadorian Professional Football League to avoid bankruptcy or serious financial problems.

Sports and taxation

As mentioned previously, taxation for clubs in Ecuador is limited by the Ecuadorian jurisdiction, which establishes that sporting clubs in Ecuador are considered non-profitable civil associations, and for that reason most clubs do not have to pay taxes. Transferring players, sponsorship, income received by national or international companies, TV rights from national or international competitions, bonuses and rewards for international competitions are tax-free in the Ecuadorian jurisdiction.

In the case of athletes, there is no specific tax disposition for image rights, sponsoring, bonuses or economic prizes won in international tournaments, and they will have to pay taxes as a regular economic income received by a common worker. The only exception is the international principle of double taxation; if the economic reward or bonus, the income from image rights or any other income received by the athlete has already been taxed in the original country, there is no obligation to pay taxes in Ecuador.

Specific sports issues

i Doping

Ecuador is a signatory to the Treaty against Doping in Sports, but it is not considered a criminal offence according to criminal law. Specifically, athletes will not face jail if they are found guilty of doping. Ecuador is a member of the World Anti-Doping Agency and has created the National Organisation of Anti-Doping in Ecuador, but does not have the competence yet to deal with anti-doping matters because of political conflict between the Ecuadorian Olympic Committee and the Sports Ministry and the failure to designate an independent anti-doping board.

In practice, the process to sanction an athlete for doping abuse will be responsibility of the national sport federation rather than an independent entity.

ii Betting

Betting or gambling on sports is allowed by the Ecuadorian jurisdiction for any person that is not involved in a sports matter. A party that is involved in a sports matter is prohibited from practising any gambling activity, especially if it involves his or her work or the work of his or her club (in the case of a board member).

This specific restriction does not belong to a particular legal framework but to each national sport federation or the contract signed by the athletes with a club, so any sanction imposed for betting will be an administrative sanction by the club or the national sport federation, and in no case will betting be considered a criminal offence by the bettor.

iii Manipulation

As in betting or gambling, manipulation is not considered a criminal offence, and will only lead to a possible administrative sanction of the club or the national sport federation.

The problem is that it is very hard to demonstrate that the manipulator had the intention to obtain a specific result that would benefit him or herself or a third party, but if someone is found guilty of manipulation, depending on the national sport federation, the sanctions can range from suspension to a fine.

iv Grey market sales

Grey market sales occur especially in football because it is the only professional sport in Ecuador that has ticket sales and can actually produce economic benefits from ticketing.

Other sports in Ecuador are limited because they do not generate enough interest for spectators to buy stadium tickets or join as members of the clubs, so grey market sales are not yet considered a big problem for the industry, although from time to time measures are considered to prevent illegal ticket sales.

Although the sale of unofficial tickets is prohibited in Ecuador, it is still an issue that does not generate enough awareness at a high level for the necessary measures to be taken to prevent these acts from being committed.

The most common way to avoid these acts has been through digital systems able to take full control of the box office, but it has not been enough. It remains to be seen after covid-19 and the return of spectators to stadiums how this process develops.

The year in review

Ecuador is not yet prepared to legislate on sports law because there are many problems to be considered that are being solved by other jurisdictions with much more knowledge on the subject.

It is important for a country such as Ecuador, which develops a lot of talented athletes, to include sports law as an important tool in building a solid career for all athletes.

It is necessary for sporting bodies in Ecuador to include specialised sports lawyers with experience on the field to avoid common mistakes regarding contracts, training compensation in football, jurisdiction and competence, dealing with international sports federations, CAS decisions and so on.

If sporting bodies in Ecuador start including specialised professionals from the sporting industry, it will be easier to create a protective environment for athletes to grow equitably and to compete against other countries.

Outlook and conclusions

There are a lot of issues that need to be considered by the government, and more effort needs to be put in to control all the areas that surround sports.

Ecuador cannot go further on sports law unless every sport starts implementing mandatory rules for the protection of athletes, so with a protective environment athletes can focus on their own development and not on administrative procedures.

Competing as an athlete does not only concern the preparation for a specific tournament or the skills you have in your sport, but also your surroundings. Ecuadorian athletes start with a disadvantage in every competition because the sporting legal system in Ecuador is informal and needs to be formalised to allow athletes to compete side by side with other countries.

Footnotes

1 Santiago José Zambrano Solano is founder and head of legal at Conlegal Sports.

2 Articles 24, 39 and 381.

3 Article 25, Ecuadorian Sports By-laws.

4 Article 26, Ecuadorian Sports By-laws.

5 Article 45, Ecuadorian Sports By-laws.

6 Article 60, Ecuadorian Sports By-laws.

7 Article 66, Ecuadorian Sports By-laws.

8 Company Law is the law dedicated to all corporate matters in Ecuador.

9 The Sports Ministry is the legal entity that manages and controls sports in Ecuador.

10 Article 166, Ecuadorian Sports By-laws.

11 Article 161, Ecuadorian Sports By-laws.

12 Article 162, Ecuadorian Sports By-laws.

13 Criminal Law, Organic and Integral Criminal Code.

14 Regulations for Ecuadorian Football Player from Ecuadorian Football Federation.

15 Ecuadorian Professional Football Player Code.

Get unlimited access to all The Law Reviews content